It has been a disastrous year for goeasy (TSX:GSY) shareholders, and that's putting it mildly. As of Monday's close, the stock has plummeted a massive 75%, and it's only been four months into the new year. Once a darling of Canadian non-prime lending, the company is now facing severe headwinds that make buying the dip an incredibly risky proposition.
The core of goeasy’s recent collapse stems from its 2021 acquisition of LendCare. In the fourth quarter of 2025, goeasy recognized an incremental $177.9 million in loan charge-offs directly related to this specific portfolio. The company admitted that efforts to recover these late-stage delinquent auto and powersports loans had been entirely exhausted. Consequently, the company's annualized net charge-off rate surged to a staggering 23.8% in the fourth quarter, up from just 9.2% a year prior. Total net charge-offs for the fourth financial quarter reached roughly $331 million. Adding to the pain, goeasy recorded a $159.6 million goodwill impairment charge connected to LendCare.
The financial fallout has rapidly forced management to take drastic and immediate actions. The company withdrew its previous three-year financial forecast and expects its net charge-off rate to remain in the mid-teens throughout 2026. Furthermore, goeasy announced that it is suspending its regular quarterly dividend indefinitely to preserve capital.
The anticipated loan loss provision increases also resulted in the company breaching certain financial covenants under its credit facilities, forcing it to seek accommodation agreements with lenders. To compound matters, the lender recently revealed it must restate prior financial statements due to accounting errors.
With immense operational uncertainty, lingering credit risks, and an indefinite dividend suspension, investors should exercise extreme caution with the stock, as there's no guarantee things will improve anytime soon for goeasy, and in the meantime, its shares can still go lower.
